Myspace is Still Dying, Preps For Layoffs

January 4, 2011

Myspace, the News Corp.-owned social network of yesterday, will layoff between a third and half of its approximately 1,100 employees, according to a report from the Wall Street Journal on Tuesday, again reigniting chatter about the company’s epic failure since a 2005 acquisition for $580 million. This after a 30% staff reduction last summer. For years the website has been hemorrhaging both users and money, and Rupert Murdoch’s media giant would be happy to sell, if only someone would buy.

News Corp. acquired Myspace in 2005 for $580 million. Since then, it has struggled to remain relevant as Facebook’s popularity has soared and it has undergone several rounds of management changes. Myspace had 54.4 million unique U.S. visitors in November, down 15% from a year ago, according to comScore. Ad spending on Myspace was expected to decline 37% last year to $347 million, according to research firm eMarketer.

By contrast, Facebook had 151.7 million unique U.S. visitors in November, up almost 50% from a year ago, according to comScore.

In the quarter ended Sept. 30, the News Corp. unit that includes Myspace reported an operating loss of $156 million, primarily due to the site’s poor performance. News Corp. said search and advertising revenues at Myspace declined $70 million in the quarter compared to the same period a year earlier.

Elsewhere, Reuters repeats the line about Myspace being for sale — CNBC reports that News Corp is “on course to sell” by mid-2011 — but clarifies, “there are no talks currently with potential buyers.” And we thought that logo was bad.